The epidemic is merciless and there is love in the world. Since the outbreak of the COVID-19 in 2020, countless medical staff, community workers and volunteers have devoted themselves to anti epidemic activities with impressive stories. Those who hold salaries for everyone should not be frozen to death in the wind and snow. The risks faced by medical personnel and volunteers in the forefront of the epidemic prevention can be imagined. We have found that during the "war" against the epidemic, news of insurance companies giving insurance to frontline personnel has frequently appeared in the newspapers.

"It is not uncommon for insurance companies to donate money and things, but many people still have many puzzles when insurance companies donate insurance.". Insurance companies donate insurance. What exactly did they donate? Is it legal and compliant for insurance companies to present insurance? Does the insurance company have an insurance interest with the recipient? What compliance points should insurance companies follow when presenting insurance? "We have sorted out the content related to gift insurance, hoping that everyone will have a clearer understanding of" gift insurance ".".

1. What is gift insurance?

According to the current legal documents in force in China, only the document (2015) No. 12 explicitly mentions "gift insurance". According to the CIRC (2015) No. 12 document, giving away insurance refers to an insurer's exemption from the obligation to pay insurance premiums when concluding an insurance contract, or performing the obligation to pay insurance premiums on behalf of the applicant.

Based on the above provisions, we understand that gift insurance is insurance that does not require the insured (including third parties) to pay insurance premiums to the insurance company. In reality, there are situations where third parties pay insurance premiums to insurance companies, purchase insurance from insurance companies, and donate to specific groups. In this situation, insurance is actually insurance in which a third party (such as a hospital) acts as the policyholder and pays the insurance premium to the insurance company. Although this insurance has the name of "donation", it is not actually the "gift insurance" we discuss here.

2. The insurance company gives away insurance, is it an insurance product?

According to Article 657 of the Civil Code, a gift contract is a contract whereby the donor gives "his own property" to the recipient without compensation. So, when an insurance company presents insurance, does it give the "insurance product" to the recipient? To clarify this issue, first of all, it should be clear: Before giving away, is the "insurance product" the property of an insurance company? Obviously not. Because before the insurance company sold the insurance product (paid or unpaid) to the policyholder, the insurance product (insurance policy) in the hands of the insurance company did not have an policyholder or an insured, and the insurance policy had not yet been established and took effect. At this time, "insurance products" have no actual "economic value" for insurance companies, and "insurance products" cannot yet be called the "property" of insurance companies. Therefore, when an insurance company presents insurance, it is not an "insurance product".

In fact, insurance companies donate insurance, and what they donate is the insurance premium that belongs to their "own property", that is, the premium that the insured buys insurance comes from the donation of the insurance company.

3. Does the insurance company have an insurance interest with the insured when presenting insurance?

The insurable interest refers to the legally recognized interest of the applicant or the insured in the subject matter of the insurance. "Donation of insurance by an insurance company does not mean that the insurance company purchases insurance for the insured as the policyholder. In the case of donation of insurance by an insurance company, specific groups (such as hospitals, schools, etc.) often act as the policyholder, and members of specific groups act as the insured.". In this case, the applicant and the insured must have an insurable interest. Because the insurance company is not the policyholder, there is no question whether the insurance company has an insurable interest.

4. Can insurance companies give away insurance?

Document (2015) No. 12 regulates the behavior of personal insurance companies giving insurance. From the content of the document, it seems that only personal insurance companies can give insurance. However, we understand that although Document (2015) No. 12 is issued to personal insurance companies, property insurance companies that have obtained approval to operate short-term health insurance and accidental injury insurance businesses can also give away insurance. In fact, we have found that during the epidemic, there are also many cases where property insurance companies give away insurance.

5. What insurance products can insurance companies give away?

In response, the Insurance Regulatory Commission (2015) No. 12 document clearly states that insurance companies can only provide two types of insurance products: accidental injury insurance and health insurance, and the insurance period of the insurance product cannot exceed 1 year. According to the "Health Insurance Management Measures (2019)", the "health insurance" here actually covers five types of insurance, including medical insurance, disease insurance, disability income loss insurance, nursing insurance, and medical accident insurance.

6. How to handle disputes over gift insurance?

As for this issue, the Shanghai Higher People's Court gave a clear opinion in the Fourth Series of Questions and Answers on the Application of Law in Cases Involving the COVID-19, which was issued on April 18, 2022: during the epidemic prevention and control period, insurance companies gave life insurance to medical staff, volunteers, community property staff, residents (villages) committee staff, etc. involved in epidemic prevention, which did not violate the mandatory provisions of laws and regulations, public order and good customs, The validity of insurance contracts should be recognized. After an insurance accident occurs, the insured and the beneficiary have the right to claim compensation from the insurance company based on the donated insurance product.

7. What compliance requirements should insurance companies follow when presenting insurance?

Regarding gift insurance, in addition to the provisions of the CIRC (2015) No. 12 document, the relevant regulatory requirements for gift insurance are mentioned again in the "Management Measures for Personal Insurance Sales Behavior (Draft for Comments)" issued by the CIRC in April this year. In response, we understand that insurance companies should comply with the following compliance requirements when presenting insurance:

(1) The insurance products presented should comply with the "Management Measures for Insurance Terms and Insurance Premiums of Personal Insurance Companies"

According to the "Measures for the Administration of Insurance Terms and Insurance Premiums of Personal Insurance Companies", insurance companies should draw up insurance terms and insurance premiums fairly and reasonably, and should not harm the legitimate rights and interests of policyholders, insured persons, and beneficiaries. Insurance companies should submit insurance terms and insurance premiums to the China Banking and Insurance Regulatory Commission for approval or filing.

(2) Insurance companies should manage the personal insurance presented as insurance products that are normally sold, and do a good job in customer service, preservation, and claim settlement
In other words, even if the insurance product is given as a gift, the insurance consumer still enjoys the same rights as the paid insurance.

(3) Giving insurance requires approval from the insurance company's head office

Before the issuance of the CIRC (2015) No. 12 document, giving insurance as a gift was more of a marketing and customer acquisition tool for insurance companies, and its purpose was to take advantage of opportunities to conduct business in disguised violation of regulations, such as using customer identity information for precise marketing. Therefore, the regulatory authorities require that the head office of an insurance company should control the giving of insurance, and it is strictly prohibited to carry out illegal business or unfair competition in the name of giving insurance in disguised form.

(4) "If an insurance company presents insurance to ordinary consumers, the net risk premium for each gift of insurance shall not exceed 100 yuan per person. Gift insurance for public welfare purposes shall not be subject to the aforementioned amount limit."

Generally speaking, for any insurance product we purchase, the insurance premium includes two parts of fees. One part is called pure risk premium, which is used to protect risks and pay future compensation; Part of this is called additional premium, which is used to maintain the normal operation of the insurance company, including operating costs such as channel commissions, manpower, and the profit of the insurance company.

The reason why regulatory authorities stipulate that the pure risk premium for insurance (promotional gift insurance) given by insurance companies to ordinary consumers should not exceed 100 yuan is actually to prevent the solvency of insurance companies from being affected after future insurance accidents by controlling the amount of pure risk premium. Because the higher the pure risk premium, the greater the risk that the insurance company protects, the higher the probability of insurance accidents occurring, and the higher the probability of compensation.

Of course, in order to practice social responsibility, insurance companies that provide insurance for public welfare purposes are not subject to the above amount limit. In fact, even without the above amount limit, the actual premium for insurance presented by most insurance companies will not be too high, and some may even be less than 10 yuan.

(5) When presenting an insurance product, the applicant shall have an insurable interest in the insured; "If the personal insurance presented is conditional on death as a condition for payment of the insurance benefits, the insurance amount shall be agreed and recognized by the insured;"; If the insured is a minor, the insurance amount paid for the death benefit shall comply with relevant regulatory regulations

The above requirements of the regulatory authorities are essentially a re emphasis on the basic requirements for personal insurance in the Insurance Law. Even for gift insurance, the basic rules of the insurance law should be adhered to. For example, Article 12 of the Insurance Law stipulates that an applicant for personal insurance should have an insurable interest in the insured at the time of conclusion of the insurance contract (see Article 31 of the Insurance Law for details on who the applicant has an insurable interest with). Otherwise, the insurance contract is invalid. Article 34 of the "Insurance Law" stipulates that a contract with death as the condition for payment of insurance benefits is invalid without the consent and approval of the insured. In addition, according to the CIRC (2015) No. 90 document, if parents purchase personal insurance for their minor children based on death as the condition for payment of insurance benefits, and if the minor children are under the age of 10, the total insurance amount shall not exceed 200000 yuan; For those who have reached the age of 10 but have not reached the age of 18, the total insurance amount shall not exceed 500000 yuan.

(6) The premium corresponding to the insurance given by an insurance company is not included in the premium income, but a liability reserve should be accrued in accordance with regulatory requirements, and the corresponding compensation should be included in the compensation cost

The premium corresponding to the gift insurance is not included in the premium income, making it impossible for insurance companies to achieve the purpose of inflated premiums through the gift insurance. In addition, in the case of gift insurance, insurance companies should also accrue liability reserves in accordance with regulatory requirements, and include compensation costs when there are future claims. The above requirements make insurance companies also face cost pressure and compensation pressure when presenting insurance. This also allows insurance companies to "exercise restraint" when presenting insurance.

(7) An insurance company shall issue a paper or electronic policy to the applicant or the insured

An insurance policy is an important evidence that the applicant/insured has an insurance contract relationship with the insurance company. After the occurrence of an insurance accident, the insurance policy is the main evidence that the applicant/insured claims rights and interests from the insurance company. Whether it is an electronic insurance policy or a paper insurance policy, an insurance company is obligated to issue it to the applicant/insured, and whether the applicant actively requests it or not, the insurance company should provide it on its own initiative. Otherwise, once an accident occurs, the insurance consumer is highly likely to fall into a rights protection dilemma due to lack of corresponding evidence.